Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2015

or

£

Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from ____________________ to ____________________

Commission file number 1-6368

Ford Motor Credit Company LLC

(Exact name of registrant as specified in its charter)

Delaware

38-1612444

(State of organization)

(I.R.S. employer identification no.)

One American Road, Dearborn, Michigan

48126

(Address of principal executive offices)

(Zip code)

(313) 322-3000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. þ Yes o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). þ Yes o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o

Accelerated filer o

Non-accelerated filer þ

Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

o Yes þ No

All of the limited liability company interests in the registrant (“Shares”) are held by an affiliate of the registrant. None of the Shares are publicly traded.

REDUCED DISCLOSURE FORMAT

The registrant meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing this Form with the reduced disclosure format.

Total shareholder’s interest attributable to Ford Motor Credit Company

11,760

11,367

Shareholder’s interest attributable to noncontrolling interests

1

—

Total shareholder’s interest

11,761

11,367

Total liabilities and shareholder’s interest

$

131,490

$

122,108

The following table includes assets to be used to settle the liabilities of the consolidated variable interest entities (“VIEs”). These assets and liabilities are included in the consolidated balance sheet above. See Notes 5 and 6 for additional information on our VIEs.

September 30, 2015

December 31, 2014

(unaudited)

ASSETS

Cash and cash equivalents

$

2,443

$

2,094

Finance receivables, net

44,036

39,522

Net investment in operating leases

11,266

9,631

Derivative financial instruments

64

27

LIABILITIES

Debt

$

41,712

$

37,156

Derivative financial instruments

30

22

The accompanying notes are part of the financial statements.

2

Item 1. Financial Statements (Continued)

FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF SHAREHOLDER’S INTEREST

(in millions, unaudited)

Shareholder’s Interest Attributable to Ford Motor Credit Company

Shareholder’s Interest

Accumulated Other Comprehensive Income

(Note 10)

Retained Earnings

Total

Shareholder’s Interest Attributable to Non-Controlling Interests

Total Shareholder’s Interest

Balance at December 31, 2014

$

5,227

$

160

$

5,980

$

11,367

$

—

$

11,367

Net income

—

—

1,011

1,011

—

1,011

Other comprehensive income/(loss), net of tax

—

(562

)

—

(562

)

1

(561

)

Distributions to parent

—

—

(56

)

(56

)

—

(56

)

Balance at September 30, 2015

$

5,227

$

(402

)

$

6,935

$

11,760

$

1

$

11,761

Balance at December 31, 2013

$

5,217

$

717

$

4,670

$

10,604

$

—

$

10,604

Net income

—

—

1,294

1,294

—

1,294

Other comprehensive income/(loss), net of tax

—

(332

)

—

(332

)

—

(332

)

Distributions to parent

—

—

(244

)

(244

)

—

(244

)

Balance at September 30, 2014

$

5,217

$

385

$

5,720

$

11,322

$

—

$

11,322

The accompanying notes are part of the financial statements.

3

Item 1. Financial Statements (Continued)

FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

(in millions)

For the periods ended September 30,

2015

2014

First Nine Months

(unaudited)

Cash flows from operating activities

Net income

$

1,011

$

1,294

Adjustments to reconcile net income to net cash provided by operations

The consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information, and instructions to the Quarterly Report on Form 10-Q and Rule 10-01 of Regulation S-X. In the opinion of management, these unaudited financial statements include all adjustments considered necessary for a fair statement of the results of operations and financial condition for interim periods for Ford Motor Credit Company LLC, its consolidated subsidiaries and consolidated VIEs in which Ford Motor Credit Company LLC is the primary beneficiary (collectively referred to herein as “Ford Credit,” “we,” “our,” or “us”). Results for interim periods should not be considered indicative of results for any other interim period or for the full year. Reference should be made to the financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2014 (“2014 Form 10-K Report”). We are an indirect, wholly owned subsidiary of Ford Motor Company (“Ford”).

We reclassified certain prior period amounts in our consolidated financial statements to conform to the presentation in our 2014 Form 10-K Report.

Provision for Income Taxes

For interim tax reporting we estimate one single effective tax rate, which is applied to the year-to-date ordinary income/(loss). Tax effects of significant unusual or extraordinary items are excluded from the estimated annual effective tax rate calculation and recognized in the interim period in which they occur.

During the third quarter of 2014, we completed a study that led to a change in our methodology for measuring currency gains and losses in computing the earnings of our European operations under U.S. tax law. Implementation of the new methodology substantially reduced the accumulated earnings of those operations under U.S. tax law and resulted in a tax benefit of $364 million in the third quarter of 2014 from the realization of additional foreign tax credits.

Adoption of New Accounting Standards

Accounting Standards Update (“ASU”) 2014-11, Transfers and Servicing - Repurchase-to-Maturity Transactions, Repurchase Financings and Disclosures. On January 1, 2015, we adopted the new accounting standard that changes the accounting for repurchase-to-maturity transactions and repurchase financing arrangements. The new standard also requires additional disclosures for certain transfers of financial assets with agreements that both entitle and obligate the transferor to repurchase the transferred assets from the transferee. The adoption of this accounting standard did not impact our financial statements or financial statement disclosures.

Accounting Standards Issued But Not Yet Adopted

ASU 2014-09,Revenue - Revenue from Contracts with Customers. In May 2014, the Financial Accounting Standards Board (“FASB”) issued a new accounting standard that requires recognition of revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. The new standard supersedes virtually all present U.S. GAAP guidance on revenue recognition and requires the use of more estimates and judgments than the present standards, as well as additional disclosures. The FASB issued ASU 2015-14 to defer the original effective date from January 1, 2017 to January 1, 2018, while allowing for early adoption as of January 1, 2017. The new accounting standard is expected to have an impact to our income statement, balance sheet, and financial statement disclosures and we are reviewing our arrangements to evaluate the impact and method of adoption.

6

Item 1. Financial Statements (Continued)

FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 1. ACCOUNTING POLICIES (Continued)

The FASB also issued the following standards, none of which are expected to have a material impact to our financial statements or financial statement disclosures.

Standard

Effective Date (a)

2015-16

Business Combinations - Simplifying the Accounting for Measurement-Period Adjustments

At September 30, 2015 and December 31, 2014, includes $571 million and $535 million, respectively, of dealer financing receivables with entities (primarily dealers) that are reported as consolidated subsidiaries of Ford. The associated vehicles that are being financed by us are reported as inventory on Ford’s balance sheet.

(c)

At September 30, 2015 and December 31, 2014, excludes $1.8 billion and $1.7 billion, respectively, of certain receivables (primarily direct financing leases) that are not subject to fair value disclosure requirements.

Excluded from finance receivables at September 30, 2015 and December 31, 2014 was $184 million and $192 million, respectively, of accrued uncollected interest, which we report in Other assets on our balance sheet.

Included in recorded investment in finance receivables at September 30, 2015 and December 31, 2014 were consumer receivables of $27.7 billion and $24.4 billion, respectively, and non-consumer receivables of $23.1 billion and $21.8 billion, respectively, that have been sold for legal purposes in securitization transactions but continue to be reported in our consolidated financial statements. The receivables are available only for payment of the debt issued by, and other obligations of, the securitization entities that are parties to those securitization transactions; they are not available to pay the other obligations or the claims of Ford Credit’s other creditors. Ford Credit holds the right to receive the excess cash flows not needed to pay the debt issued by, and other obligations of, the securitization entities that are parties to those securitization transactions (see Note 5 for additional information).

8

Item 1. Financial Statements (Continued)

FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 2. FINANCE RECEIVABLES (Continued)

Aging

For all finance receivables, we define “past due” as any payment, including principal and interest, that is at least 31 days past the contractual due date. The recorded investment of consumer receivables greater than 90 days past due and still accruing interest was $15 million and $17 millionat September 30, 2015andDecember 31, 2014, respectively. The recorded investment of non-consumer receivables greater than 90 days past due and still accruing interest was $3 million at September 30, 2015 and December 31, 2014.

The aging analysis of finance receivables balances was as follows (in millions):

September 30, 2015

December 31, 2014

Consumer

31-60 days past due

$

597

$

718

61-90 days past due

94

97

91-120 days past due

25

29

Greater than 120 days past due

39

52

Total past due

755

896

Current

58,369

53,200

Consumer finance receivables

59,124

54,096

Non-Consumer

Total past due

127

117

Current

33,785

33,023

Non-Consumer finance receivables

33,912

33,140

Total recorded investment

$

93,036

$

87,236

Credit Quality

Consumer Segment

Credit quality ratings for consumer receivables are based on our aging analysis. Refer to the aging table above.

Consumer receivables credit quality ratings are as follows:

•

Pass – current to 60 days past due

•

Special Mention – 61 to 120 days past due and in intensified collection status

•

Substandard – greater than 120 days past due and for which the uncollectible portion of the receivables has already been charged off, as measured using the fair value of collateral

Non-Consumer Segment

Dealers are assigned to one of four groups according to risk ratings as follows:

Impaired consumer receivables include accounts that have been rewritten or modified in reorganization proceedings pursuant to the U.S. Bankruptcy Code that are considered to be Troubled Debt Restructurings (“TDRs”), as well as all accounts greater than 120 days past due. Impaired non-consumer receivables represent accounts with dealers that have weak or poor financial metrics or dealer financing that has been modified in TDRs. The recorded investment of consumer receivables that were impaired at September 30, 2015 and December 31, 2014 was $375 million, or 0.6% of consumer receivables, and $415 million, or 0.8% of consumer receivables, respectively. The recorded investment of non-consumer receivables that were impaired at September 30, 2015 and December 31, 2014 was $129 million, or 0.4% of non-consumer receivables, and $110 million, or 0.3% of non-consumer receivables, respectively. Impaired finance receivables are evaluated both collectively and specifically.

The accrual of revenue is discontinued at the time a receivable is determined to be uncollectible. Accounts may be restored to accrual status only when a customer settles all past-due deficiency balances and future payments are reasonably assured. For receivables in non-accrual status, subsequent financing revenue is recognized only to the extent a payment is received. Payments are generally applied first to outstanding interest and then to the unpaid principal balance.

A restructuring of debt constitutes a TDR if we grant a concession to a debtor for economic or legal reasons related to the debtor’s financial difficulties that we otherwise would not consider. Consumer and non-consumer receivables that have a modified interest rate below market rate or that were modified in reorganization proceedings pursuant to the U.S. Bankruptcy Code, except non-consumer receivables that are current with minimal risk of loss, are considered to be TDRs. We do not grant concessions on the principal balance of our receivables. If a receivable is modified in a reorganization proceeding, all payment requirements of the reorganization plan need to be met before remaining balances are forgiven. Finance receivables involved in TDRs are specifically assessed for impairment.

10

Item 1. Financial Statements (Continued)

FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 3. NET INVESTMENT IN OPERATING LEASES

Net investment in operating leases consist primarily of lease contracts for vehicles with retail customers, daily rental companies, government entities, and fleet customers with terms of 60 months or less.

Net investment in operating leases were as follows (in millions):

September 30, 2015

December 31, 2014

Vehicles, at cost (a)

$

28,674

$

24,952

Less: Accumulated depreciation

(4,117

)

(3,396

)

Net investment in operating leases before allowance for credit losses

24,557

21,556

Less: Allowance for credit losses

(47

)

(38

)

Net investment in operating leases

$

24,510

$

21,518

__________

(a)

Includes unearned interest supplements and residual support payments we receive on certain leasing transactions under agreements with Ford and affiliated companies, and other vehicle acquisition costs.

At September 30, 2015 and December 31, 2014, includes net investment in operating leases before allowance for credit losses of $11.3 billion and $9.6 billion, respectively, that have been included in securitization transactions but continue to be reported in our consolidated financial statements. These net investment in operating leases are available only for payment of the debt issued by, and other obligations of, the securitization entities that are parties to those securitization transactions; they are not available to pay our other obligations or the claims of our other creditors. We hold the right to receive the excess cash flows not needed to pay the debt issued by, and other obligations of, the securitization entities that are parties to those securitization transactions (see Note 5 for additional information).

11

Item 1. Financial Statements (Continued)

FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 4. ALLOWANCE FOR CREDIT LOSSES

An analysis of the allowance for credit losses related to finance receivables and net investment in operating leases for the periods ended September 30 (in millions) was as follows:

Third Quarter 2015

Finance Receivables

Net Investment in Operating Leases

Total Allowance

Consumer

Non-Consumer

Total

Allowance for credit losses

Beginning balance

$

322

$

13

$

335

$

45

$

380

Charge-offs

(85

)

(2

)

(87

)

(31

)

(118

)

Recoveries

29

1

30

15

45

Provision for credit losses

80

2

82

18

100

Other (a)

(4

)

—

(4

)

—

(4

)

Ending balance

$

342

$

14

$

356

$

47

$

403

First Nine Months 2015

Finance Receivables

Net Investment in Operating Leases

Total Allowance

Consumer

Non-Consumer

Total

Allowance for credit losses

Beginning balance

$

305

$

16

$

321

$

38

$

359

Charge-offs

(235

)

(3

)

(238

)

(87

)

(325

)

Recoveries

90

4

94

46

140

Provision for credit losses

190

(2

)

188

51

239

Other (a)

(8

)

(1

)

(9

)

(1

)

(10

)

Ending balance

$

342

$

14

$

356

$

47

$

403

Analysis of ending balance of allowance for credit losses

Collective impairment allowance

$

323

$

12

$

335

$

47

$

382

Specific impairment allowance

19

2

21

—

21

Ending balance

342

14

356

47

$

403

Analysis of ending balance of finance receivables and net investment in operating leases

Collectively evaluated for impairment

58,749

33,783

92,532

24,557

Specifically evaluated for impairment

375

129

504

—

Recorded investment

59,124

33,912

93,036

24,557

Ending balance, net of allowance for credit losses

$

58,782

$

33,898

$

92,680

$

24,510

__________

(a)

Primarily represents amounts related to translation adjustments.

12

Item 1. Financial Statements (Continued)

FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 4. ALLOWANCE FOR CREDIT LOSSES (Continued)

Third Quarter 2014

Finance Receivables

Net Investment in Operating Leases

Total Allowance

Consumer

Non-Consumer

Total

Allowance for credit losses

Beginning balance

$

303

$

24

$

327

$

26

$

353

Charge-offs

(68

)

(2

)

(70

)

(28

)

(98

)

Recoveries

33

2

35

15

50

Provision for credit losses

42

(3

)

39

18

57

Other (a)

(5

)

(1

)

(6

)

—

(6

)

Ending balance

$

305

$

20

$

325

$

31

$

356

First Nine Months 2014

Finance Receivables

Net Investment in Operating Leases

Total Allowance

Consumer

Non-Consumer

Total

Allowance for credit losses

Beginning balance

$

327

$

30

$

357

$

23

$

380

Charge-offs

(200

)

(7

)

(207

)

(82

)

(289

)

Recoveries

101

8

109

47

156

Provision for credit losses

82

(10

)

72

43

115

Other (a)

(5

)

(1

)

(6

)

—

(6

)

Ending balance

$

305

$

20

$

325

$

31

$

356

Analysis of ending balance of allowance for credit losses

Collective impairment allowance

$

283

$

19

$

302

$

31

$

333

Specific impairment allowance

22

1

23

—

23

Ending balance

305

20

325

31

$

356

Analysis of ending balance of finance receivables and net investment in operating leases

Collectively evaluated for impairment

53,150

31,815

84,965

20,947

Specifically evaluated for impairment

421

136

557

—

Recorded investment

53,571

31,951

85,522

20,947

Ending balance, net of allowance for credit losses

$

53,266

$

31,931

$

85,197

$

20,916

__________

(a)

Primarily represents amounts related to translation adjustments.

13

Item 1. Financial Statements (Continued)

FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 5. TRANSFERS OF RECEIVABLES

We securitize finance receivables and net investment in operating leases through a variety of programs using amortizing, variable funding, and revolving structures. We also sell finance receivables in structured financing transactions. Due to the similarities between securitization and structured financing, we refer to structured financings as securitization transactions. Our securitization programs are targeted to institutional investors in both public and private transactions in capital markets including the United States, Canada, several European countries, Mexico, and China.

We engage in securitization transactions to fund operations and to maintain liquidity. Our securitization transactions are recorded as asset-backed debt and the associated assets are not derecognized and continue to be included in our financial statements.

The finance receivables sold for legal purposes and net investment in operating leases included in securitization transactions are available only for payment of the debt issued by, and other obligations of, the securitization entities that are parties to those securitization transactions. They are not available to pay our other obligations or the claims of our other creditors. We hold the right to receive the excess cash flows not needed to pay the debt issued by, and other obligations of, the securitization entities that are parties to those securitization transactions. The debt is the obligation of our consolidated securitization entities and not the obligation of Ford Credit or our other subsidiaries.

Most of these securitization transactions utilize VIEs. See Note 6 for more information concerning VIEs. The following tables show the assets and debt related to our securitization transactions that were included in our financial statements (in billions):

September 30, 2015

Cash and Cash Equivalents

Finance Receivables and Net Investment in Operating Leases (a)

Related Debt

Before Allowance

for Credit Losses

Allowance for

Credit Losses

After Allowance

for Credit Losses

VIE (b)

Retail financing

$

1.5

$

21.9

$

0.1

$

21.8

$

19.9

Wholesale financing

0.3

22.2

—

22.2

14.5

Finance receivables

1.8

44.1

0.1

44.0

34.4

Net investment in operating leases

0.6

11.3

—

11.3

7.3

Total VIE

$

2.4

$

55.4

$

0.1

$

55.3

$

41.7

Non-VIE

Retail financing

$

0.4

$

5.8

$

—

$

5.8

$

5.3

Wholesale financing

—

0.9

—

0.9

0.9

Finance receivables

0.4

6.7

—

6.7

6.2

Net investment in operating leases

—

—

—

—

—

Total Non-VIE

$

0.4

$

6.7

$

—

$

6.7

$

6.2

Total securitization transactions

Retail financing

$

1.9

$

27.7

$

0.1

$

27.6

$

25.2

Wholesale financing

0.3

23.1

—

23.1

15.4

Finance receivables

2.2

50.8

0.1

50.7

40.6

Net investment in operating leases

0.6

11.3

—

11.3

7.3

Total securitization transactions

$

2.8

$

62.1

$

0.1

$

62.0

$

47.9

__________

(a)

Unearned interest supplements and residual support are excluded from securitization transactions.

(b)

Includes assets to be used to settle the liabilities of the consolidated VIEs.

14

Item 1. Financial Statements (Continued)

FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 5. TRANSFERS OF RECEIVABLES (Continued)

December 31, 2014

Cash and Cash Equivalents

Finance Receivables and Net Investment in Operating Leases (a)

Related Debt

Before Allowance

for Credit Losses

Allowance for

Credit Losses

After Allowance

for Credit Losses

VIE (b)

Retail financing

$

1.4

$

18.8

$

0.1

$

18.7

$

17.3

Wholesale financing

0.3

20.8

—

20.8

13.3

Finance receivables

1.7

39.6

0.1

39.5

30.6

Net investment in operating leases

0.4

9.6

—

9.6

6.6

Total VIE

$

2.1

$

49.2

$

0.1

$

49.1

$

37.2

Non-VIE

Retail financing

$

0.3

$

5.6

$

—

$

5.6

$

5.2

Wholesale financing

—

1.0

—

1.0

0.9

Finance receivables

0.3

6.6

—

6.6

6.1

Net investment in operating leases

—

—

—

—

—

Total Non-VIE

$

0.3

$

6.6

$

—

$

6.6

$

6.1

Total securitization transactions

Retail financing

$

1.7

$

24.4

$

0.1

$

24.3

$

22.5

Wholesale financing

0.3

21.8

—

21.8

14.2

Finance receivables

2.0

46.2

0.1

46.1

36.7

Net investment in operating leases

0.4

9.6

—

9.6

6.6

Total securitization transactions

$

2.4

$

55.8

$

0.1

$

55.7

$

43.3

__________

(a)

Unearned interest supplements and residual support are excluded from securitization transactions.

(b)

Includes assets to be used to settle the liabilities of the consolidated VIEs.

NOTE 6. VARIABLE INTEREST ENTITIES

VIEs of Which We Are the Primary Beneficiary

We use special purpose entities to issue asset-backed securities in transactions to public and private investors, bank conduits, and government-sponsored entities or others who obtain funding from government programs. We have deemed most of these special purpose entities to be VIEs as we have determined we have both the power to direct the activities of the entity that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits of the entity that could be significant. The asset-backed securities are backed by finance receivables and interests in net investments in operating leases. The assets continue to be consolidated by us. We retain interests in our securitization VIEs, including subordinated securities issued by the VIEs, rights to cash held for the benefit of the securitization investors, and rights to receive the excess cash flows not needed to pay the debt issued by, and other obligations of, the securitization entities that are parties to those securitization transactions.

15

Item 1. Financial Statements (Continued)

FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 6. VARIABLE INTEREST ENTITIES (Continued)

We have no obligation to repurchase or replace any securitized asset that subsequently becomes delinquent in payment or otherwise is in default, except when representations and warranties about the eligibility of the securitized assets are breached, or when certain changes are made to the underlying asset contracts. Securitization investors have no recourse to us or our other assets and have no right to require us to repurchase the investments. We generally have no obligation to provide liquidity or contribute cash or additional assets to the VIEs and do not guarantee any asset-backed securities. We may be required to support the performance of certain securitization transactions, however, by increasing cash reserves.

See Note 5 for information on the financial position and financial performance of our VIEs.

VIEs of Which We Are Not the Primary Beneficiary

We have an investment in Forso Nordic AB, a joint venture determined to be a VIE of which we are not the primary beneficiary. The joint venture provides retail and dealer financing in its local markets and is financed by external debt and additional subordinated debt provided by the joint venture partner. The operating agreement indicates that the power to direct economically significant activities is shared with the joint venture partner, and the obligation to absorb losses or right to receive benefits resides primarily with the joint venture partner. Our investment in the joint venture is accounted for as an equity method investment and is included in Other assets. Our maximum exposure to any potential losses associated with this VIE is limited to our equity investment and amounted to $66 million at September 30, 2015 and December 31, 2014.

NOTE 7. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

In the normal course of business, our operations are exposed to global market risks, including the effect of changes in interest rates and foreign currency exchange rates. To manage these risks, we enter into highly effective derivative contracts. We have elected to apply hedge accounting to certain derivatives. Derivatives that are designated in hedging relationships are evaluated for effectiveness using regression analysis at the time they are designated and throughout the hedge period. Some derivatives do not qualify for hedge accounting; for others, we elect not to apply hedge accounting.

Income Effect of Derivative Financial Instruments

The gains/(losses), by hedge designation, recorded in income for the periods ended September 30 were as follows (in millions):

Third Quarter

First Nine Months

2015

2014

2015

2014

Fair value hedges

Interest rate contracts

Net interest settlements and accruals excluded from the assessment of hedge effectiveness

$

94

$

79

$

271

$

220

Ineffectiveness (a)

10

(2

)

6

8

Derivatives not designated as hedging instruments

Interest rate contracts

(22

)

(10

)

(83

)

(37

)

Foreign currency exchange contracts

40

52

40

22

Cross-currency interest rate swap contracts

63

118

75

102

Total

$

185

$

237

$

309

$

315

__________

(a)

For the third quarter and first nine months of 2015, hedge ineffectiveness reflects the net change in fair value on derivatives of $373 million gain and $345 million gain, respectively, and change in value on hedged debt attributable to the change in benchmark interest rates of $363 million loss and $339 million loss, respectively. For the third quarter and first nine months of 2014, hedge ineffectiveness reflects the net change in fair value on derivatives of $88 million loss and $179 million gain, respectively, and change in value on hedged debt attributable to the change in benchmark interest rates of $86 million gain and $171 million loss, respectively.

Derivative financial instruments are recorded on the balance sheet at fair value, presented on a gross basis, and include an adjustment for non-performance risk. Notional amounts are presented on a gross basis. The notional amounts of the derivative financial instruments do not necessarily represent amounts exchanged by the parties and, therefore, are not a direct measure of our financial risk exposure. We enter into master agreements with counterparties that may allow for netting of exposure in the event of default or termination of the counterparty agreement due to breach of contract.

Includes forward contracts between Ford Credit and an affiliated company.

(b)

At September 30, 2015 and December 31, 2014, we did not receive or pledge any cash collateral.

17

Item 1. Financial Statements (Continued)

FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 8. OTHER ASSETS AND OTHER LIABILITIES AND DEFERRED INCOME

Other assets and other liabilities and deferred income consist of various balance sheet items that are combined for financial statement presentation due to their respective materiality compared with other individual asset and liability items.

Other assets were as follows (in millions):

September 30, 2015

December 31, 2014

Accrued interest and other non-finance receivables

$

832

$

921

Collateral held for resale, at net realizable value

372

382

Restricted cash (a)

73

130

Deferred charges

280

268

Deferred charges – income taxes

164

185

Prepaid reinsurance premiums and other reinsurance receivables

435

401

Investment in non-consolidated affiliates

149

141

Property and equipment, net of accumulated depreciation (b)

134

120

Other

55

53

Total other assets

$

2,494

$

2,601

__________

(a)

Restricted cash primarily includes cash held to meet certain local governmental and regulatory reserve requirements and cash held under the terms of certain contractual agreements. Restricted cash does not include required minimum balances or cash securing debt issued through securitization transactions.

(b)

Accumulated depreciation was $335 million and $326 million at September 30, 2015 and December 31, 2014, respectively.

Other liabilities and deferred income were as follows (in millions):

September 30, 2015

December 31, 2014

Interest payable

$

486

$

587

Tax related payables to Ford and affiliated companies

138

625

Unrecognized tax benefits

99

91

Unearned insurance premiums

449

410

Other

477

497

Total other liabilities and deferred income

$

1,649

$

2,210

18

Item 1. Financial Statements (Continued)

FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 9. DEBT

Interest rates and debt outstanding were as follows (in millions):

Interest Rates

Debt

Average Contractual

Average Effective

September 30, 2015

December 31, 2014

2015

2014

2015

2014

Short-term debt

Unsecured debt

Floating rate demand notes

$

5,854

$

5,559

Commercial paper

1,941

1,651

Other short-term debt

2,012

2,564

Asset-backed debt

1,877

1,377

Total short-term debt

11,684

11,151

1.5

%

1.9

%

1.5

%

1.9

%

Long-term debt

Unsecured debt

Notes payable within one year

7,899

9,102

Notes payable after one year

47,013

42,488

Asset-backed debt (a)

Notes payable within one year

18,462

16,722

Notes payable after one year

27,553

25,197

Unamortized discount

(37

)

(51

)

Fair value adjustments (b)

735

428

Total long-term debt

101,625

93,886

2.3

%

2.7

%

2.4

%

2.8

%

Total debt

$

113,309

$

105,037

2.2

%

2.6

%

2.3

%

2.7

%

Fair value of debt (c)

$

114,187

$

107,190

__________

(a)

Asset-backed debt issued in securitizations is the obligation of the consolidated securitization entity that issued the debt and is payable only out of collections on the underlying securitized assets and related enhancements. This asset-backed debt is not the obligation of Ford Credit or our other subsidiaries.

The fair value of debt includes $9.8 billion of short-term debt at September 30, 2015 and December 31, 2014, carried at cost, which approximates fair value. All debt is categorized within Level 2 of the fair value hierarchy.

NOTE 10. ACCUMULATED OTHER COMPREHENSIVE INCOME

The changes in the balance of Accumulated Other Comprehensive Income (“AOCI”) attributable to Ford Credit for the periods ended September 30 were as follows (in millions):